Castillo contributes P360,000 cash, land which she bought for P440,000, and a building that cost him P1,120,000 and has been depreciated P320,000, to the newly formed partnership of C & C Company. The building is valued at P1,520,000 and has an outstanding mortgage of P800,000. The land is valued at P760,000. Claveria contributes P164,000 cash, equipment valued at P400,000 with an outstanding note payable of P120,000, and an automobile valued at P160,000. Claveria originally paid P480,000 for the equipment which has been depreciated P160,000. The partners have agreed to share profits and losses equally. All obligations attached to contributed assets are assumed by the new partnership. 9. The entry to record the investment by Castillo includes a debit to: a. building for P800,000 b. various asset accounts for a total of P2,160,000 C. building for P1,120,000 d. various asset accounts for a total of P2,640,000
Castillo contributes P360,000 cash, land which she bought for P440,000, and a building that cost him P1,120,000 and has been depreciated P320,000, to the newly formed partnership of C & C Company. The building is valued at P1,520,000 and has an outstanding mortgage of P800,000. The land is valued at P760,000. Claveria contributes P164,000 cash, equipment valued at P400,000 with an outstanding note payable of P120,000, and an automobile valued at P160,000. Claveria originally paid P480,000 for the equipment which has been depreciated P160,000. The partners have agreed to share profits and losses equally. All obligations attached to contributed assets are assumed by the new partnership. 9. The entry to record the investment by Castillo includes a debit to: a. building for P800,000 b. various asset accounts for a total of P2,160,000 C. building for P1,120,000 d. various asset accounts for a total of P2,640,000
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 34P
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Transcribed Image Text:Castillo contributes P360,000 cash, land which she bought for P440,000, and a
building that cost him P1,120,000 and has been depreciated P320,000, to the
newly formed partnership of C & C Company. The building is valued at
P1,520,000 and has an outstanding mortgage of P800,000. The land is valued at
P760,000.
Claveria contributes P164,000 cash, equipment valued at P400,000 with an
outstanding note payable of P120,000, and an automobile valued at P160,000.
Claveria originally paid P480,000 for the equipment which has been depreciated
P160,000. The partners have agreed to share profits and losses equally.
All obligations attached to contributed assets are assumed by the new
partnership.
9. The entry to record the investment by Castillo includes a debit to:
a. building for P800,000
b. various asset accounts for a total of P2,160,000
C. building for P1,120,000
d. various asset accounts for a total of P2,640,000
75
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